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The markets continue to trade firm in a positive territory in the anticipation of a growth-oriented Budget. Both domestic and foreign investors are closely eyeing the Rail Budget and the Union Budget as these two parameters are expected to decide the future course of Indian markets.
Meanwhile, the crude oil price correction, increase in non-subsidized cooking gas cylinder and diesel prices and hike in railway fares also play a crucial role in setting the market direction.
At 2.30 PM, the 30-share Sensex is trading at 26,060 mark up by 100 points and the 50-share Nifty is trading at 7,768 mark up by 17 points.
Global Markets
Asian shares are trading mixed after the extended U.S. market holiday and recent stock gains in the region Asia lacked a cue from the U.S., where Wall Street was closed on Friday due to the Fourth of July holiday. Japan’s Nikkie dipped 0.3%% and Hong Kong'Hang Seng Index is trading flat with negative bias. On the other hand, Straits Times Index is up 0.5% and Shanghai Composite Index is trading marginally in green.
Local Currency
The rupee is trading at 60 against the US dollar due to demand for the US currency from importers.
The strengthening of the dollar against other currencies in global markets boosted by the US jobs report and exerted pressure on the rupee.
Sectors & Stocks
On the sectoral front, barring BSE Oil & Gas, Metal, FMCG indices and BSE Bankex, all other BSE indices are trading in green with BSE IT index leading the rally up by 2% followed by Power, Realty and Capital goods indices trading between 0.3-0.6%.
Shares of information technology (IT) companies are in demand on expectation of strong revenue growth during the recently (April-June) concluded quarter.
Infosys, Tata Consultancy Services (TCS), MindTree, HCL Technologies and Wipro from the frontline IT stocks are up 1-3%, while R S Software, eClerx Services, Mastek, Zensar Technologies and Polaris Financial Technology have gained between 5-10% on the Bombay Stock Exchange (BSE).
Among Pharma shares, Sun Pharma and Dr Reddy’s Lab have gained between 0.7-2.5%. In contrast Cipla is trading marginally in the negative zone. Cipla has decided to invest £100 million in its UK subsidiary over the next few years.
In the power space, NTPC and Tata Power continue to maintain the momentum, up 0.3% and 3.5% , each.
Tata Power gained after the company signed an option deal to sell a 5% in coal miner PT Kaltim Prima Coal (KPC) to get additional cash flow as well as to reduce its consolidated debt.
Furthermore, renewed buying is visible in the metal pack. Sesa Sterlie, Hindalco, Tata Steel and Coal India have climbed between 0.2-0.6%
The Realty sector is witnessing an upsurge on the back of the promises the government has made to provide financial incentives to developers to build low-cost and affordable housing for people.
On the flip side, Oil and Gas shares continue to dwindle in red after the Oil Minister Dharmendra Pradhan decided not to raise prices of kerosene and LPG. Gail, ONGC and Reliance have lost between 0.5-1.3%
In addition, heavy selling is evident in the financial sector. The key concern lies in the levels of non-performing assets (NPAs). BSE Bankex is down 0.9%. HDFC twins, ICICI Bank, Axis Bank and SBI have declined between 0.2-1.4%
FMCG shares including ITC and HUL have dipped on increase in inflation and decline in demand.
Among other shares, Railway related stocks continued their upward march and were trading higher by up to 7%, second day in a row ahead of the Railway Budget which is scheduled for tomorrow. The Railway Budget is likely to focus on modernisation and devise new strategies for attracting private investment.
South Indian Bank has surged nearly 8% to Rs 35.05, also its record high on BSE, after Mohnish Pabrai, a leading US-based fund manager, has bought an over one percentage point stake in the private sector bank for Rs 64 crore from the open market.
BSE Smallcap index is trading in line with the large counterparts up by 0.5%, whereas the BSE Midcap index is meagerly up by 0.1%
The market breadth in BSE remains positive with 1,629 advances and 1,381 declines.
